Thousands of north and north-east households will have a new name at the top of their energy bills next year if regulators approve a £500 million takeover of SSE’s domestic supply arm.
Bristol-based Ovo Energy will catapult into the so-called Big Six UK energy suppliers, becoming the second largest after British/Scottish Gas.
Nearly 40% of SSE’s 21,000-strong workforce – about 8,000 employees, including 2,700 in Scotland – will transfer to Ovo, which is part-owned by Japan’s Mitsubishi Corporation.
Unite the Union warned it would not tolerate workers paying the price for the sale with their jobs, pay and terms and conditions, and would be seeking urgent meetings with both firms to secure “cast iron” assurances.
Peter McIntosh, the union’s national officer for energy, said the announcement was already causing “massive uncertainty” among customer service staff, smart meter installers and meter readers.
Consumer group Which? said 3.5 million houeholds around the UK may benefit from the proposed takeover of SSE Energy Services.
Natalie Hitchins, head of home products and services, Which?, said: “Ovo performed well in our most recent annual energy survey, with consumers praising the firm for excellent online customer service, so SSE customers may stand to benefit.
“We will be watching closely to ensure Ovo maintains these high standards as it faces the challenge of taking on millions of new customers and becoming one of the biggest suppliers in the energy market.”
The deal’s £500m enterprise value includes a £100m loan note to SSE – effectively an interest-bearing IOU – which is due for repayment in 2019.
The takeover is expected to complete later this year or early in 2020.
Shares in SSE rose nearly 2% before slipping back.
Ovo founder and chief executive Stephen Fitzpatrick said: “This transaction marks a significant moment for the energy industry. SSE and Ovo are a great fit.”
